abcnews.go.com The Associated Press DAVOS, Switzerland Jan. 25 —

Saudi Arabia's oil minister said Saturday that his country and OPEC could make up for any interruption in oil supplies from a war in Iraq, adding the price of oil had been driven too high "by all these drums of war."

Oil Minister Ali Naimi said history showed that producers had been able cover disruptions such as the current seven-week strike that reduced supplies from Venezuela.

"Although I admit there is a perception of a threat to supply, producers and consumers are working to mitigate the threat," Naimi said at a panel discussion at the World Economic Forum in Davos.

"There is no reason for the price of oil to be as high as it is today."

Naimi said suppliers from the Organization of Petroleum Exporting Countries oil cartel had stepped into the gap during past Gulf upheavals that temporarily reduced deliveries, including the 1979 Iranian revolution, the Iran-Iraq war in the 1980s, and the 1991 Gulf war.

He pointed to Saudi Arabia's policy of holding significant production capacity of 3 million barrels a day in reserve.

"No matter what we say, no matter what we do, there are always doubts whether we will deliver," Naimi said. "But history is on our side."

He said fears of a U.S. attack on Iraq had driven prices, currently over $33 a barrel, to an excessive level, despite OPEC efforts to produce more oil in response to the disruption in Venezuela.

"Did we bring the price back to $25?" he said. "We didn't, because there are all these drums of war."

OPEC's president, Qatar's Oil Minister Abdullah bin Hamad al-Attiyah, agreed, saying "there is no shortage of oil." He said OPEC may even face an oil surplus when its members next meet in March.

OPEC decided Jan. 12 to raise its output ceiling by 1.5 million barrels a day, effective Feb. 1.

Oil market participants fear Iraq may destroy its oil production facilities in case of an attack by the United States. Iraq is the fourth-largest exporter in OPEC, producing 2.5 million barrels a day in January.

March oil futures jumped $1.03 to $33.28 a barrel on the New York Mercantile Exchange on Friday.

www.hindustantimes.com Agence France-Presse Davos (Switzerland), January 25

The president of the Organisation of Petroleum Exporting Countries on Saturday said the oil cartel could consider a cut in output when it meets in March, to counter a potential surplus in supply.

"By March we will see a three million (barrels per day, bpd) surplus...For sure if there is a surplus we will look at cutting (output)," OPEC president Abdullah bin Hamad al-Attiyah said.

Al-Attiyah was speaking on the sidelines of a meeting on security of oil supply in the light of a possible war on Iraq, on the third day of the World Economic Forum in Davos, Switzerland.

Attiyah, who is Qatar's Minister of Energy and Industry, told the forum there was speculation that a US-led war on Iraq could take 2.5 million bpd off the market and OPEC had reacted to balance demand and supply by raising production several times over past months.

But OPEC customers were not short of oil.

"There is no shortage of supply," he said. I asked (consumers) one question: 'Do you need more oil... ?' They answered no.

"On March 11, when OPEC will meet again, I think they (OPEC) will face a lot of difficulties with a huge surplus of oil."

The possibility of an end to a lengthy oil workers' strike in heavyweight Venezuela and the reduction in the need for heating fuel as the northern hemisphere winter drew to a close meant there could be two million bpd back on the market shortly, he said.

Attiyah said fears about security of supply -- that this week pushed world oil prices beyond the OPEC price band of $22-28 a barrel to around $33 -- were not always well founded.

In New York, light sweet crude March-dated contracts rose to $33.28 per barrel yesterday. The price of benchmark Brent North Sea crude oil for March delivery closed up at $30.25 per barrel in London.

www.forbes.com Reuters, 01.25.03, 3:16 AM ET

DAVOS, Switzerland, Jan 25 (Reuters) - Saudi Oil Minister Ali Naimi said on Saturday there was no shortage of oil in the market despite fears of war in Iraq and there were no grounds for prices to be as high as they now are.

"There is no shortage in the market and there should be no reason for prices where they are today," Naimi told a panel discussion at the World Economic Forum annual meeting in the Swiss ski resort of Davos. "That is speculation. Those are perceptions (of a shortage)."

He said oil prices would be above $40 a barrel now if Saudi Arabia had not maintained spare capacity of around three million or 3.5 million barrels per day.

OPEC aims to keep prices for a basket of its crude in a $22-$28 range and has just raised production quotas by seven percent to 1.5 million barrels a day effective February 1.

Prices have topped that range to hit two-year highs this week amid fears of a U.S.-led war in Iraq and due to a general strike that has cut exports from OPEC member Venezuela.

www.canoe.ca Saturday, January 25, 2003 By CP

FORT MCMURRAY -- Sky-high oil prices, higher output and lower operating costs at Syncrude Canada drove Canadian Oil Sands Trust's fourth-quarter 2002 earnings to $94.5 million -- almost triple the amount earned in the same period last year.

"The benefit of robust crude oil prices was optimized by solid, steady operations at Syncrude in the second half of the year," Marcel Coutu, the trust's president and chief executive officer, said in a statement to investors.

Syncrude president Jim Carter acknowledged the trust's bonanza has a lot to do with continued instability in the Middle East over fears of a U.S.-led war on Iraq and a general strike that has crippled Venezuela's oil production.

"There's not really an awful lot we can do at this end about the price of oil," said Carter.

"All we can really do is keep getting our costs down and our production up."

www.forbes.com Reuters, 01.25.03, 5:02 AM ET

(corrects typo in first paragraph) By Knut Engelmann

DAVOS, Switzerland, Jan 25 (Reuters) - Saudi Arabia said on Saturday there was no lack of oil in world markets despite fears of war in Iraq, signalling the world's top oil producer has no intention to raise production further for the moment.

"There is no shortage in the market and there should be no reason for prices (to be) where they are today," Saudi Oil minister Ali al-Naimi told a panel discussion at the World Economic Forum annual meeting in the Swiss ski resort of Davos.

"We checked. We called. I checked with individual customers, refineries and others. I ask them one question: Do you feel you need more oil? And the answer is no," he said.

Oil prices have surged -- topping the $22-$28 range per barrel that OPEC is targeting -- amid fears of a U.S.-led war in Iraq and because of a seven-week-old general strike that has cut exports from OPEC member Venezuela.

In the United States, prices hit a high of $35.20 this week. U.S. crude traded above $33 on Friday.

"We believe $25 is the right price to meet the interests" of producers, consumers, and world oil companies, Naimi said. "We will try to get it back at $25. That's where we want it to be."

OPEC aims to keep prices for a basket of its crude in a $22-$28 range and has just raised production quotas by seven percent or 1.5 million barrels a day effective February 1.

"There are all these drums of war going around," Naimi said. "It has nothing to do with supply. We know there is a balance of demand and supply."

Still, Naimi pledged that Saudia Arabia and the rest of the Organisation of Petroleum Exporting Countries, which it dominates, would work together, should a war in Iraq and continued troubles in Venezuela continue to keep a lid on world oil supplies.

"We have always said that regardless of the cause of the shortage, OPEC and Saudi Arabia will do their utmost to make up for the shortage," he said.

His comments echoed those of OPEC Secretary-General Alvaro Silva, who told the high-powered gathering on Friday there was nothing more OPEC could do to rein in runaway world oil prices.

"What can we do more? I do not agree there is a lack of oil," he said. "The problem of the price is the threat of war."

Naimi said oil prices would be above $40 a barrel now if Saudi Arabia had not maintained spare capacity of around three million or 3.5 million barrels per day. But he declined to say exactly what Saudi Arabia's daily production level was.

Naimi added his country could quickly boost oil output to 10.5 million barrels per day, should supplies be disrupted for any reason. But it would need around 90 days to get the infrastructure in place to support such high output levels in the longer term.

Saudi Arabia's production quota was set at 7.963 million barrels per day from February but sources in the kingdom say it is expected to be pumping 8.5-9 million in the next few weeks.

OPEC President Abdullah al-Attiyah warned there may in fact be a glut of oil in world markets soon as the onset of warm weather in the northern hemisphere cuts demand just as the group has raised supply.

"We calculated that we will have a three million barrel (per day) surplus by March," he told Reuters. OPEC will next meet on March 11 to review its output levels.

The northern springtime normally cuts demand for crude by around two million barrels per day (bpd), and another two to 2.5 million bpd could be flowing onstream if the strike in Venezuela is resolved by then.